According to the Federal Trade Commission, the test for unfairness assumes a tripartite approach. Three critical aspects are considered in analysis whether a practise is unfair or not. The paper shall briefly examine the three steps of analysis. Foremost, the substance of the injury is examined. The injury must be substantial in a way as to cause economic, social safety and or a health damage. According to this test, the harm occasioned by the conduct of the market player needs to be substantial enough to occasion an injury to the consumers and that injury must to be against public policy. Secondly, the test determines whether the benefits outweigh the injuries or harm caused by the unfairness. In this, the test examines the weight of the harm against the benefits to the consumers and the competitors. In the event the benefits outweigh the harm, the practise is considered fair and the converse holds. Finally, the practise must be one that the consumer under reasonable circumstances cannot avoid. In the event the practise in the market can be avoided by the consumer in the form of pursuing alternatives, it shall not be considered unfair. The Federal Trade Commission considers deceit and trickery in advertisement on media such as television and the internet as unfair. In that regard, the commission advocates for honesty and full disclosure in advertising concerns and practises.
In Treadway v Gatesway Chevrolet Oldmobile Inc. the defendant failed to issue an adverse action to the customer (appellant) who had not been given credit in her name as applied contrary to the provisions of the Equal Credit Opportunity Act. The facts were that Treadway was declined credit due to her low credit ability. Instead of being given an adverse action notification, she was instructed to provide an assignee. It is the latter’s name that the credit was obtained. This was, however, contrary to the law which provided that the creditor and or the dealer who declines credit to the customer should inform the customer in form of a notification of adverse action. The Court found that the defendant had sidestepped the law and failed to observe the legal provisions both by the spirit and the letter. I agree with the holding of the court. It is this paper’s contention that the approach assumed by the defendant in denying the customer credit and failing to inform her in the form of a notification was an affront to the law and needed to be cured in the way the court held.
Sarbanes Oxley Act, 2002 was prompted by the unethical practises particularly by corporates. The greed and selfish pursuit of profits was being advanced to the detriment of ethics and public policy. A case in point is the Enron scandal in which creative and fraudulent accounting had been used to defraud the public of its finances. The Sarbanes Oxley Act among other things promotes whistle blowing and ethical principles and accountability in the management of corporates and businesses.
Eleven years down the line, it is the contention of this paper that the Sarbanes Oxley Act is working. This argument is premised on the current awareness in the business community and the strengthened regulatory framework. For instance, the Public Company Accounting Oversight Board, a product of the Act has been established and continues to strength accounting and auditing standards and requirements imposed on public companies. In addition, the ethical awareness and consciousness has increased with whistleblowing taking a central role in reduction or mitigation of financial frauds. However, this is not to say that the financial circles have no challenges. Indeed, despite the Act, financial fraud still continues right in the eyes of accountants and auditors. Lehman fraud is a case in point.
Beales, J. H. (2013, March 2). The FTC's Use of Unfairness Authority: Its Rise, Fall, and Resurrection. Retrieved May 19, 2013, from Federal Trade Commission: http://www.ftc.gov/speeches/beales/unfair0603.shtm
Martens , T., & Kelleher, A. (2004). A Global Perspective on Whistleblowing. International Business Ethics Review, 7(2), 1-14.
Treadway v. Gateway Chevrolet Oldsmobile Inc., 362 F. 3d 971 (Court of Appeal 7th Circuit April 2, 2004).
Velasquesz , M. (2006). Enron's fall. In M. Velasquez, Business Ethics, Concepts and Cases (pp. 53-55). New York: Pearson: Prentice Hall.